Jan 30, 2009

It's Good To Be Optimistic, But It's Bad to be Stupid

I feel that the Straits Times is trying too hard to be optimistic, in the following article. Observe how it violently twists its numbers, to paint a more positive picture:
ST Jan 30, 2009
Expect 2% less pay
Drop due to firms cutting bonuses, but basic wages likely to be on uptrend
By Fiona Chan

TOTAL pay packages are likely to take a hit this year as the rapidly worsening economic crisis exerts a heavier toll on Singaporeans.

A new survey by the Singapore Human Resources Institute (SHRI) has found that employers plan to give out less in bonuses this year, with the lowest payments coming from small firms and United States-based companies.

..... 'It is heartening that companies are cutting costs to save jobs and not cutting jobs to save costs,' said SHRI, which polled 208 companies on their wage, bonus and recruitment plans.

The survey, done in conjunction with RDS Remuneration Data Specialists, found that while virtually all companies have been affected by the worldwide downturn, many 'are hopeful of being able to weather the financial storm'.

Just 7 per cent have retrenched or plan to retrench staff this year - less than the 10 per cent last year. However, only four in 10 companies will be hiring this year, compared with more than six in 10 last year.
Okay, back up and read that sentence again - "Just 7 per cent have retrenched or plan to retrench staff this year - less than the 10 per cent last year."

What does that mean? It means that in the entire year of 2008 (that is, over 12 months), 10 per cent of companies retrenched or had plans to retrench staff. And it also means that in the very first month of 2009 (today being 30 January 2009), 7 per cent of companies have already retrenched or made plans to retrench staff.

That doesn't strike me as particularly "heartening" or "hopeful". What will the next 11 months bring?

21 comments:

Anonymous said...

Hi,
I interpreted that statement as meaning 7% is the figure for whole of 2009, not actual retrenchment for Jan 2009. It is a survey and hence they probably invited predictions for the whole year instead of actual figures for Jan 2009.
I think the figure is unrealistic as more than 7% are likely to retrench given the economic climate.
The problem then would be that as less companies predicted hiring, less jobs will be created for those who were retrenched to even try to get hired for.

Anonymous said...

Clearly you misunderstand the article. If 7% of companies plan to retrench staff this year, they must have taken into account what the year was going to be like. As you say, we're only in January - why would any firm be optimistic about not having to retrench staff for the whole year, if it didn't already have a plan in place?

Many bloggers tend to jump at the throats of national newspapers without making an effort to really read or understand articles. Don't be one of them.

Mr Wang Says So said...

i shall explain. It's now january. So far this year, 7 per cent of companies have already retrenched or made plans to do so. As the year goes on, and we reach March or June or september, there will be even more companies that will retrench staff or make plans to do so, even though back in january, they had not retrenched anyone yet and had not yet made any plans to do so. By end 2009, what will the 7 per cent figure become?

Anonymous said...

We know what you mean. The question is, do you understand what the other commenters mean? It doesn't appear so.

What the ultimate retrenchment numbers will be is anyone's guess. But given the whole bunch of bad news that keeps coming out, the fact that only 7% of firms so far plan to retrench this year seems a positive indicator by any stretch of the imagination.

Ludude said...

To the Anons,

Lol, hope you guys stop being so naive.

Ah Beng said...

Announced and out in the press = 7%.
Retrenching in process and hidden from the press = X%
Planning to retrench but not ready to alert the press = Y%.

Anonymous said...

On the other hand, if the economy suddenly turns around, the 7% number may prove too pessimistic.

However, everyone is expecting the economy to get worse this year. So Mr Wang is correct in saying that the 7% figure is overly optimistic, especially when the survey is taken before the Chinese New Year.

If you think that the economy is going to get better this year, I have a bridge to sell to you :)

ArtBoon said...

A survey is just a survey.
Sometime people don't say what they intend to do.
Human nature is to be hopeful and optimistic.
That is why people don't anticipate Lehman, or refuse to see Madoff.
If I don't question, then I will be going blindly what others ask me to go.
I trust others in order to live life happily. Trust has to be earned over years but can also disappear in a minute too.

Anonymous said...

The point is very simple. You cannot use figures taken over a 12-month period, and then use figures taken over a 1-month period, and compare them directly, as if the comparison made sense.

It's like saying: "In 2008, 50,000 babies were born in Singapore .... but in 2009, only 4,200 babies were born. A shocking decline!". This forgets that only one month in 2009 has elapsed so far.

Finally, no company makes plans in January to retrench people in December, November, October, September, etc. This doesn't mean retrenchment won't happen then.

Also to the first Anon, the newspaper article didn't say that companies were asked to 'predict' whether they would retrench in 2009. They were asked to say whether they had 'made plans' to retrench or had actually retrenched.

There's a big difference between "making predictions" and "making plans".

Anonymous said...

Mr Wang, I would like to raise an off-topic point. Apologies if this is inappropriate.

Even though you dont own a car I am sure you must have heard about the latest increase in petrol prices. However this time around petrol prices went up but diesel prices went down. I dont recall this ever happening before. Usually the prices of petrol and diesel would rise and fall in tandem.

With the latest price changes, it is as if petrol consumers are being made to 'subsidise' diesel consumers. Most petrol consumers as you know are ordinary consumers while most diesel users are businesses. The effect is that the cost of doing business in Singapore would go down somewhat and this is in line with the current drive to lower business costs in the hope that companies would not lay off workers.

Is it possible that SOMEONE (wink)"suggested" to the oil companies to adjust their prices like this?

It all falls nicely doesnt it? Business cost is lowered but nothing more needs to be taken from the national coffers. Instead private car owners get hit again and oil companies maintain their current income levels.

Lesser Onlooker Bacter said...

The best part is we still have to serve NS (active/reservist) that will place us under the less performing employee catergory.
Uniquely Singapore,no?

Anonymous said...

Whether 7% or 10 % or more may just be the tip of the iceberg. Official figures may not capture accurately the real situation on the ground. But doesn't matter. Because the ground will still be very peaceful, even if it is 20%. To politicians this is very important. That's my gut observation and prediction based on many years living and observing the economics and politics in red dot.

Anonymous said...

To the anon above,

with due respect,USSR was very peaceful and called the other super-power until Berlin wall collapsd.

I do not believe our great leader has such confidence,trouble is, I observe that his physical appearence is deteriorating fast,day by day.

Anonymous said...

I do not believe our great leader has such confidence,trouble is, I observe that his physical appearence is deteriorating fast,day by day.


I am inclined to see it as positive news. Like the collapse of the Berlin wall.

klimmer said...

I am surprised to hear some people find Siberian gulags peaceful.

klimmer said...

Of course this statistic also doesn't take into consideration the companies that will withdraw from Asia, those that will go into administration or those that will relocate/ centralise away from Singapore.
I feel sorry for those people in their silly inflated cars and inflated condos.

utopia8787 said...

for the anonys above,

it is no big hoo-ha that people is ever ready to slam the national papers.
singapore's press has lost public's confidence and is now known widely as a propaganda mouthpiece of the government(many thanks to the internet). the government refusal to implement freedom of speech forced us to resort to sarcasm and satirism, which surprisingly garnered more interest among the younger generations than the government's lame creations of p65-like blogs, podcast.sg and YPAP.

Anonymous said...

The point is that the ST would play up positive figures. Remember those who talked about financial woes in 2007 or even at the beginning of 2008 were shouted down. So don't worry, we'll all getting there.

Anonymous said...

well, this goes to show that Fiona Chan is not young journalist of the year for nothing.

crap.

Cram Speaking said...

Hi

Nice discussion. My two cents:

Was a survey made in January 2008 on company's retrenchment plans? Plans change with time and circumstances...it's quite possible that in Jan 2008 only, say, 1% of companies planned any sort of job cuts for the year, but 10% ended up doing so by Dec. Which would be far worse than what ST pretends.

Similarly, in Jan 2009 only 7% may have planned job cuts, but with the economy being what it is, 7% could transmogrify into 35% by Dec. Who knows?

Anonymous said...

Why do you all trust the survey so much? SHRI is helmed by an MP and therefore is a mouthpiece for the govt. For those who have worked there before will know how wayang they are. Do you all know how much the executive director there earns? It is in the league of more than half a peanut. Yet they unashamedly make use of many retrenched professionals to work for real peanuts. The pay divide between their management and staff is very wide. Something like the NKF thing where social service is good for you. Must give back to society but when comes to their own pay, then it is another story. Why bother with what they say?